AFP

Myanmar's junta said it has arrested two cyber scam ringleaders operating from a lawless northern town and wanted by China, and a third took his own life during the arrest.

Online scam compounds have mushroomed in Myanmar's borderlands and are staffed by citizens from China and other countries who are often trafficked and forced to work swindling their compatriots.

The scams anger Beijing, a major ally of the junta, and China has repeatedly told the military to crack down on the industry, which analysts say is worth billions of dollars a year.

"Ming Xuechang, Ming Guoping, Ming Julan... were arrested in Laukkai town in the Kokang self-administered zone," the junta's information team said in a statement late Thursday.

Ming Xuechang "shot himself while he was being arrested and died later while getting treatment", the statement said, without giving details or mentioning when the three had been arrested.

According to media reports, Ming Xuechang was a former representative for the Kokang region in the Shan state regional parliament.

Ming Guoping and Ming Julan had been handed over to Chinese police on Thursday, the junta statement said.

Chinese authorities issued an arrest warrant for the three and another individual named Ming Zhenzhen last week.

Ming Xuechang headed a group that "organised and opened fraud dens for a long time... carrying out telecommunications and network fraud crimes that target Chinese citizens", according to Chinese state media.

The junta statement made no mention of Ming Zhenzhen.

AFP has contacted the Chinese embassy in Yangon for comment.

The United Nations said this year that at least 120,000 people could be trapped in scam compounds in Myanmar.

Last month an armed alliance of ethnic minority groups launched an offensive against the military across a swathe of northern Shan state, where Laukkai is located.

One of the groups, the Myanmar National Democratic Alliance Army (MNDAA), has said it aims to recapture the former boomtown after it was forced out by the military in 2009.

As fighting approaches Laukkai, thousands of Myanmar migrant workers have fled.

Some have told AFP they had walked for days and been forced to sleep by the roadside as artillery and airstrikes pounded the area.

AFP